22nd August 1998 Archive

Why oh why is Acorn’ s capitalised at £35 million less than the 26.8 per cent stake it holds in ARM, the RISC chip wonder stock, asked bemused shareholder R.S. Grewal of London, in a letter to this week’s Investors Chronicle. "I have looked into all the other factors such as debt," he writes, "but apart from the fact that Olivetti at the end of June disposed of most of their shareholding in Acorn, I cannot see any other good enough reason to justify the slide". Except that – as Investors Chronicle helpfully points out – Acorn’s holding in ARM is subject to a £40 million tax charge – which the market has factored into the company’s pitifully low share price. RS Grewal argues that Acorn’s future must be brighter than ARM – as it is employed "in more interactive digital TV trials worldwide than any other". At least he has the good sense to refrain from mention that technological cul-de-sac the Acorn RISC PC (just a little joke for all our fans in the Acorn community). But Investors Chronicle replies that "while a case can be argued for the potential of Acorn’s new products, they have yet to earn profits which makes any investment a speculative one". It points out that the company has "an operating loss of £5.6 million and hasn’t made a real profit since 1993". Nevertheless, the magazine rates Acorn’s shares as good value. Supported by the ARM stake, the company represents an "opportunity", it says. ®

Social control can only go so far. Even in Singapore, the nanny city-state, where spitting chewing gum on to the pavement merits a three-month prison sentence. So what lies in store for the arsonists who attempted to torch a Motorola PCB plant on the day it was sold to WUS Printed Circuits of Taiwan? Motorola, which flogged off two plants in a manufacturing outsourcing deal to WUS a few weeks back, will receive compensation – as it has not yet completed the handover of the facilities to WUS But only if arson is not the cause. As two fires broke out the same day on the same site, it doesn’t take Sherlock Holmes to detect a little helping hand going on here. Disgruntled employees are suspected, according to WUS, which is pointing the finger at the ranks of staffers who did not receive severance pay – unlike 500 co-workers who got pay-offs from Motorola when they were laid off last year. A second bone of contention, according to WUS, with the more recently laid-off staff, is the company’s statement that it may rehire workers from the first group of lay-offs. WUS is to swap production to factories in Taiwan and China, until repairs of the fire-damaged plant are completed. The company said it would continue to manufacture PCBs in Singapore for Motorola. ®

Ciena’s planned $7 billion merger with Tellabs is in danger of unravelling, f ollowing the failure of the telecoms equipment manufacturer to secure a massive contract with AT&T. News sent Ciena stock into a tail-spin, plunging 45 per cent on one day. In a massive vote of no-confidence, Ciena shareholders went in to a selling frenzy on Friday, With more than 29 million Ciena shares sold, trading levels were ten times the average daily volume. To make matters worse for Ciena, the company’s shareholders had been due to vote on the merger with Tellabs – the same day it announced that AT&T had scrapped its evaluation of the company’s 80-chanel wave division multiplexing systems. The vote was postponed – understandably in the circumstances – until September 9. In May, Ciena said it expected sales in the near term to be "largely dependent upon sales to Sprint, several new customers, and depending on the results of ongoing testing and evaluation, AT&T". In light of this, the mass exodus of Ciena shareholders, appears entirely sensible. Lucent is now the hot favourite to win the AT&T contract to supply more than 1,000 80-channel systems, according to US reports. ®

Sequoia has set up sales, support, and administration offices in Dublin to support sales of its XML-based BackOffice for Healthcare in the Emea region, and it has appointed Chris McCarthy to run the operation. Sequoia is seeking ISVs that will embed its technology with their own applications. The company’s European drive is backed by Microsoft through its World Wide Healthcare Industry Solutions group. Sequoia said it also expects to announce a formal marketing and development relationship soon with Lernout & Hauspie, the Belgium-based developer of speech recognition software. XML is a non-proprietary development tool that integrates with Microsoft SQL Server. Sequoia is focusing its initial European sales drive on Sequoia Interchange98, a BackOffice for Healthcare that integrates charts, templates, reports, and other patient data interchangeably from a variety of health care computer applications over widely distributed systems. It is a set of back-end technology components delivering such features as heterogeneous workflow, standard messaging, data distribution, security, and ubiquitous access to information. ®

Arrow UK said that it will unify its different businesses in the UK under the name of Microtronica. It operated under the names of MMD PC, Microtronica and Multichip. That follows a re-branding exercise in its business across Northern Europe, under the same name. A representative for the company said there were no layoffs associated with the change, which will not happen until January 1st next year. The move means that Arrow will bring all the computer products businesses it owns under one roof in the first half of next year, probably in the Reading area. The UK operation will be headed by Les Billing as managing director, who reports to Microtronica’s Northern Europe MD Skip Skippervold. ®